DCIT, Yamunanagar V. M/s Yamuna Power & Infrastructure Ltd., Jagadhari

ITA 1087/CHANDI/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8231 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 19-10-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Reopening of assessment
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 80IA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.1087/CHD/2016 (ASSESSMENT YEAR : 2009-10) THE D.C.I.T., VS. M/S YAMUNA POWER & YAMUNA NAGAR CIRCLE, INFRASTRUCTURE LTD., YAMUNA NAGAR. SARDANA NAGAR, AMBALA ROAD, JAGADHRI. PAN: AAACY0554A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANOJ MISHRA, CIT DR RESPONDENT BY : SHRI SUDHIR SEHGAL DATE OF HEARING : 28.12.2016 DATE OF PRONOUNCEMENT : 15.03.2017 O R D E R PER ANNAPURNA GUPTA, A.M . : THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), PANCHKULA DATED 26.8.2016 RELATING TO ASSESSMENT YEAR 2009-10. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS : 1. WHETHER THE CIT(A), PANCHKULA WAS RIGHT IN HOL DING THAT REOPENING OF THE ASSESSMENT U/S 147/148 IS NOT BASE D ON ANY FRESH MATERIAL WHICH CAN LEAD TO FORMATION OF BELIEF THAT THERE WAS ESCAPEMENT OF INCOME AND ISSUE OF NOTICE U/S 148 IS BASED ON THE CHANGE OF THE OPINION OF THE A.O. 2 2. WHETHER THE CIT(A), PANCHKULA WAS RIGHT IN DELET ING THE ADDITION MADE BY THE AO ON ACCOUNT DEDUCTION CLAIME D U/S 80IAOFTHEI.T.ACT, 1961 BY RELYING UPON THE D ECISION OF THE HON'BLE ITAT, CHANDIGARH IN THE CASE OF THE SAM E ASSESSEE FOR THE A.Y.2010-11 & 2011-12 WHEREIN IT WAS HELD T HAT THE INITIAL ASSESSMENTYEARA.Y.2004-05 WAS INADVERTENTLY MENTIONED IN FROM 10CCB, SINCE IN ALL THE AUDIT REPORTS FOR A .Y. 2004-05, 2008-09,2010-11&2011-12, THE INITIAL YEAR HAS BEEN MENTIONED A.Y. 2004-05 ONLY. 3. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET-ASIDE AND THAT OF THE A.O. BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE G ROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND DISPOSED OFF. 3. AT THE OUTSET IT MAY BE MENTIONED THAT WHILE GROUND NO.1 IS A LEGAL GROUND CHALLENGING THE ACTIO N OF THE CIT (APPEALS) IN HOLDING THAT THE REOPENING OF ASSESSMENT U/S 147 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) WAS INVALID, THE GROUND NO.2 RAISED BY T HE REVENUE DEALS WITH THE MERITS OF THE CASE CHALLENGI NG THE ACTION OF THE LD. CIT (APPEALS) IN ALLOWING ASSESSE ES CLAIMED OF DEDUCTION U/S 80IA OF THE ACT. 4. DURING THE COURSE OF HEARING BEFORE US IT WAS COMMON GROUND BETWEEN BOTH THE PARTIES THAT GROUND NO.2 RAISED BY THE REVENUE WAS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE I.T.A.T., CHANDIGARH B ENCH IN THE PRECEDING YEAR AND IN SUBSEQUENT YEARS ALSO. THEREFORE, GROUND NO.2 IS BEING FIRST TAKEN UP BY U S FOR ADJUDICATION. 3 5. AS MENTIONED ABOVE, THE REVENUE IN GROUND NO.2 HAS CHALLENGED THE ACTION OF THE LD. CIT (APPEALS) IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFF ICER ON ACCOUNT OF DEDUCTION CLAIMED U/S 80IA OF THE ACT . 6. BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSEE COMPANY HAD ESTABLISHED TWO WIND MILLS IN DISTRICT JAISALMER, RAJASTHAN 20 MW WIND FARM AT VI LLAGE GORERA AND 25 MW WIND FARM AT VILLAGE SODA MADA ON 30.3.2004 RESPECTIVELY. THE ASSESSEE HAD CLAIMED DEDUCTION U/S 80IA OF THE ACT OF RS.1,07,39,474/- @ 100% OF THE INCOME EARNED FROM BUSINESS OF WIND POWER GENERATION PROJECTS. THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS NOTED THAT OPERATION OF WIND MILL FARMS HAD BEEN COMMENCED IN FINANCIAL YEAR 2003-04 AND THE ASSESSEE COMPANY HAD INCURRED LOSSES FOR ASSESS MENT YEARS 2004-05 TO 2006-07. THE ASSESSING OFFICER THEREAFTER HELD THAT IN VIEW OF THE PROVISIONS OF S ECTION 80IA(5) OF THE ACT, THE QUANTUM OF DEDUCTION AVAILA BLE TO THE ASSESSEE FROM THE ELIGIBLE BUSINESS HAD TO BE COMPUTED AS IF SUCH BUSINESS WAS THE ONLY SOURCE OF INCOME OF THE ASSESSEE DURING PREVIOUS YEAR RELEVAN T TO INITIAL ASSESSMENT YEAR AND EVERY SUBSEQUENT ASSESS MENT YEAR. THE ASSESSING OFFICER, THEREFORE, HELD THAT THE LOSSES OF THE WIND MILL FROM THE YEAR IN WHICH IT S TARTED GENERATING ELECTRICITY NEEDED TO BE NOTIONALLY CARR IED FORWARD AND SET OFF AGAINST THE PROFITS FROM THE WI ND MILL BUSINESS IN THE SUBSEQUENT YEARS AND ONLY AFTER THE ENTIRE 4 LOSS WAS ABSORBED BY THE INCOME FROM WIND MILL, DEDUCTION U/S 80IA OF THE ACT WAS AVAILABLE. AS PE R THE ASSESSING OFFICER THOUGH THE ASSESSEE HAD AN OPTION TO CHOOSE A BLOCK OF 10 CONSECUTIVE ASSESSMENT YEARS O UT THE GROSS BLOCK OF 15 YEARS, AS PER THE PROVISIONS OF SECTION 80 IA THE INITIAL ASSESSMENT YEAR WOULD STILL BE TAKEN AS THE YEAR WHEN THE BUSINESS COMMENCES I.E. THE ASSES SEE BEGINS TO GENERATE POWER. THE ASSESSING OFFICER TH EREAFTER NOTED THAT AFTER SETTING OFF THE LOSSES PERTAINING TO ASSESSMENT YEARS 2004-05 TO 2006-07 AGAINST THE INC OME FOR ASSESSMENT YEARS 2007-08 TO 2009-10, THERE WAS STILL BROUGHT FORWARD LOSSES OF RS.691 LACS. HE, THEREFO RE, HELD THAT THE INCOME OF THE ASSESSEE FROM THE ELIGIBLE B USINESS WAS NIL AND ACCORDINGLY, DEDUCTION CLAIMED BY THE ASSESSEE U/S 80IA OF RS.1,07,39,470/- WAS DISALLOWE D. 7. THE ASSESSEE FILED AN APPEAL AGAINST THE SAID ORDER BEFORE THE LD. CIT (APPEALS). THE LD. CIT (A PPEALS) FOUND THAT IDENTICAL ISSUE HAD BEEN DECIDED IN FIRS T APPEAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEARS 20 10-11 TO 2012-13, WHEREIN THE SAID DISALLOWANCE HAD BEE N DELETED. FURTHER THE LD. CIT (APPEALS) NOTED THAT THE FINDINGS OF THE LD. CIT (APPEALS) IN ASSESSMENT YEA RS 2010-11, 2011-12 AND 2012-13 HAD BEEN UPHELD BY THE HON'BLE I.T.A.T., CHANDIGARH BENCH IN ITS ORDER IN ITA NOS.1062 & 1063/CHD/2014 , DATED 10.2.2016 AND IN I TA NO.571/CHD/2016 DATED 6.4.2016 RESPECTIVELY. SINCE THE FACTS AND ISSUE REMAINED THE SAME, THE LD. CIT (APP EALS) 5 ALLOWED ASSESSEES APPEAL ON THIS ISSUE DELETING DISALLOWANCE MADE BY THE ASSESSING OFFICER OF DEDUC TION CLAIMED U/S 80IA OF THE ACT AMOUNTING TO RS.1,07,39,470/-. 8. AGAINST THIS ORDER OF THE LD. CIT (APPEALS), TH E DEPARTMENT HAS NOW COME UP IN APPEAL BEFORE US. 9. THE LD. COUNSEL FOR THE ASSESSEE DURING THE COURSE OF HEARING BEFORE US POINTED OUT THAT BESIDE S THE ORDER OF THE I.T.A.T. IN ASSESSEES OWN CASE FOR AS SESSMENT YEARS 2010-11 TO 2012-13 AS REFERRED TO BY THE LD. CIT (APPEALS), THE ISSUE HAD ALSO BEEN DECIDED BY THE I .T.A.T. IN ASSESSMENT YEAR 2008-09. THE LD. COUNSEL FOR TH E ASSESSEE POINTED OUT THAT FOLLOWING THE ORDER OF TH E I.T.A.T. IN ASSESSMENT YEARS 2010-11 TO 2012-13, TH E ISSUE IN ASSESSMENT YEAR 2008-09 HAD ALSO BEEN DECI DED IN ASSESSEES FAVOUR VIDE ORDER IN ITA NO.595/CHD/2 013 AND ITA NO.561/CHD/2016 DATED 28.11.2016. COPY OF T HE ORDER WAS FILED BEFORE US. 10. THE LD. DR, THOUGH CONCEDED THAT THE ISSUE HAD BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE I.T.A .T. IN ASSESSMENT YEARS 2008-09, 2010-11, 2011-12 AND 2012 - 13, YET HE RELIED UPON THE ORDER OF THE ASSESSING O FFICER IN THIS REGARD. 11. WE HAVE HEARD THE SUBMISSIONS OF BOTH THE PARTIES, HAVE ALSO GONE THROUGH THE ORDERS OF THE 6 AUTHORITIES BELOW AND DOCUMENTS PLACED BEFORE US. THE ISSUE IN THE PRESENT APPEAL PERTAINS TO WHETHER FOR CLAIMING DEDUCTION U/S 80IA OF THE ACT, THE LOSSES WHICH WERE INCURRED BY THE ELIGIBLE BUSINESS IN THE PERIO D EARLIER TO THE INITIAL YEAR ARE TO BE NOTIONALLY CARRIED FO RWARD TO THE INITIAL ASSESSMENT YEAR AND THUS ADJUSTED BEFOR E CLAIMING DEDUCTION U/S 80IA OF THE ACT. UNDOUBTEDL Y, IDENTICAL ISSUE HAD ARISEN IN THE PRECEDING YEAR I .E. ASSESSMENT YEAR 2008-09 AND IN THE SUCCEEDING YEARS I.E. ASSESSMENT YEARS 2010-11 TO 2012-13 IN ASSESSEES C ASE WHICH HAVE ALL BEEN DECIDED IN FAVOUR OF THE ASSESS EE BY THE I.T.A.T. VIDE ITS ORDERS AS NOTED ABOVE. WE FI ND THAT THE I.T.A.T. RELYING UPON THE DECISION OF THE KARNA TAKA HIGH COURT IN THE CASE OF CIT VS. ANIL H. LAD 102 DTR 241 (KAR), THE JUDGEMENT OF THE MADRAS HIGH COURT I N THE CASE OF VELAYUDHASWAMY SPINNING MILLS PRIVATE LIMIT ED VS CIT (2010) 231 CTR 368(MAD AND THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF SHEVIE EXPORTS (2013) 156 TTJ 525(MUM), HAS HELD THAT THER E WAS NO NEED TO NOTIONALLY CARRIED FORWARD LOSSES OF ELIGIBLE BUSINESS PERTAINING TO THE PERIOD EARLIER TO THE I NITIAL ASSESSMENT YEAR. FURTHER WE FIND THAT THE COURT HAD ALSO HELD THAT THE OPTION OF CHOOSING BLOCK OF 10 Y EARS OUT OF 15 YEARS IS WITH THE ASSESSEE AS PER THE PROVISI ONS OF SECTION 80IA OF THE ACT AND THE LOSSES CLAIMED BY T HE ASSESSEE IN RESPECT OF ELIGIBLE BUSINESS IS TO BE S ET OFF AGAINST THE INCOME OF THE ASSESSEE FROM OTHER INELI GIBLE BUSINESS IN RESPECT OF ASSESSMENT YEARS PRIOR TO TH E 7 INITIAL ASSESSMENT YEAR AND THERE IS NO NEED TO NOTIONALLY CARRY FORWARD THESE LOSSES UP TO THE IN ITIAL ASSESSMENT YEAR AND WRITE OFF THE SAME OUT OF THE PROFITS OF THE ELIGIBLE BUSINESS. THE TRIBUNAL HAD ALSO RE LIED UPON CBDT CIRCULAR NO.1/2016 DATED 15.2.2016 WHICH HAD CLARIFIED THIS ISSUE AND HELD THAT THE TERM IN ITIAL ASSESSMENT YEAR WOULD MEAN THE FIRST YEAR OPTED FO R BY THE ASSESSEE FOR CLAIMING DEDUCTION U/S 80IA OF THE ACT AND, THEREFORE, ALSO LOSSES PERTAINING TO THE PERIO D PRIOR TO THE INITIAL ASSESSMENT YEAR WERE NOT REQUIRED TO BE SET OFF FROM THE PROFITS EARNED THEREAFTER. IN VIE W OF THE ABOVE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT (APPEALS).,FOLLOWING THE ORDER OF THE I.T.A.T. IN T HE PRECEDING YEAR AND HOLDING THAT AS PER THE PROVISIO NS OF SECTION 80I|A OF THE ACT, THE ASSESSEE WAS ENTITLED TO CLAIM ASSESSMENT YEAR 2008-09 AS ITS INITIAL ASSES SMENT YEAR FOR THE PURPOSE OF CLAIMING DEDUCTION OF PROF ITS U/S 80IA AND THERE WAS NO NEED TO SET OFF LOSSES PERTAI NING TO THE PRIOR PERIOD, THUS IN EFFECT, HOLDING THAT THE ASSESSEE WAS ELIGIBLE TO CLAIM DEDUCTION OF ITS ELIGIBLE PRO FITS OF THE WIND MILL BUSINESS AMOUNTING TO RS.1,07,39,470/-. 12. WE FURTHER FIND THAT THE REVENUE IN THE GROUND RAISED BEFORE US ALSO RAISED THE ISSUE OF ASSESSEE CLAIMING ASSESSMENT YEAR 2008-09 AS INITIAL ASSESSMENT YEAR WHEN IN FORM NO.10CCB IT HAD MENTIONED ASSESSMENT YEAR 2004-05 AS THE INITIAL YEAR. WE FIND THAT T HIS ISSUE HAD ALSO BEEN DEALT WITH BY THE I.T.A.T. IN THE CAS E OF THE 8 ASSESSEE FOR ASSESSMENT YEAR 2008-09 IN ITS ORDER P ASSED IN ITA NO.595/CHD/2013 AND ITA NO.561/CHD/2016 WHEREIN IT WAS FOUND BY THE I.T.A.T. THAT IN THE SA ID ASSESSMENT YEAR THIS ISSUE HAD BEEN TAKEN UP BEFORE THE LD. CIT (APPEALS) ALSO, WHO HAD HELD THAT MENTIONIN G OF ASSESSMENT YEAR 2004-05 WAS AN ERROR ON THE PART OF THE ASSESSEE SINCE IN ASSESSMENT YEARS 2008-09 TO 2010- 11, THE AUDIT REPORTS MENTIONED ASSESSMENT YEAR 2008-09 AS THE INITIAL YEAR ONLY. THE LD. CIT (APPEALS) HAD , THEREFORE, ACCEPTED THE CORRECT AUDIT REPORTS FROM THE AUDITORS FILED DURING THE APPELLATE PROCEEDINGS MEN TIONING INITIAL ASSESSMENT YEAR AS ASSESSMENT YEAR 2008-0 9. NO APPEAL HAD BEEN FILED AGAINST THIS FINDING OF THE L D. CIT (APPEALS) AND, THEREFORE, THE I.T.A.T. HAD HELD THA T THE ISSUE HAD ATTAINED FINALITY AND HAD DISMISSED THE CONTENTION RAISED BY THE REVENUE IN THIS REGARD. S INCE THIS ISSUE HAS ALREADY BEEN DECIDED IN FAVOUR OF TH E ASSESSEE IN ASSESSMENT YEAR 2008-09 WHEREIN IT HAS BEEN CATEGORICALLY HELD THAT MENTIONING OF ASSESSMENT YE AR 2004-05 WAS ONLY AN ERROR ON THE PART OF THE ASSESS EE WHEN IN ALL SUBSEQUENT FORMS NO.10CCB, IT HAD MENTIONED 2008-09 AS THE ASSESSMENT YEAR ONLY AND T HE CORRECTED FORM MENTIONING ASSESSMENT YEAR 2008-09 A S INITIAL ASSESSMENT YEAR HAD BEEN FILED BEFORE THE LD. CIT (APPEALS) AND ACCEPTED BY IT ALSO, IT STANDS SETTL ED THAT THE ASSESSMENT YEAR 2008-09 WAS ALL ALONG TREATED B Y THE ASSESSEE AS THE INITIAL ASSESSMENT YEAR AND NOT ASSESSMENT YEAR 2004-05, THEREFORE, ALSO THE GROUND 9 RAISED BY THE REVENUE NEEDS TO BE DISMISSED. 13. GROUND NO.2 RAISED BY THE REVENUE IS, THEREFOR E, DISMISSED. 14. SINCE WE HAVE ADJUDICATED THE ISSUE ON MERITS IN FAVOUR OF THE ASSESSEE, THE ISSUE RAISED IN GROUND NO.1 BEING LEGAL GROUND, REMAINS ONLY ACADEMIC IN NATURE AND, THEREFORE, THE SAME IS NOT BEING DEALT WITH BY US. 15. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 15 TH MARCH, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH